Common myths

People can take expert advice of the finance professionals also before making an investment.

They see their future expenses as per today’s expenses and also do calculations on today’s basis. The reality is that future expenses will always be higher than today because the purchasing power of money goes on decreasing.

Suppose your cost of marriage is 10 lakhs today. You kept Rs 10 lakh in bank for the purpose of your daughter’s marriage which is expected to happen after 5 years from now. After 5 years cost of marriage become 12 lakhs due to inflation. Now that 10 lakhs will not be sufficient to meet the marriage expenses. So, the assumption of keeping sufficient fund in bank locker or savings account may put you in distress.

This may not be true in every circumstance. Amount of pension is very small as compared to the salary they were getting earlier. The person may have to still fulfill some family responsibility like marriage of children etc.

If they want to continue the same lifestyle even after retirement, they will need more money than the pension amount.

Common mistakes we do with our Money

There are some common mistakes which most of us do with our money. These common money mistakes are –

Instead of cutting short your expenses try to grow your income

We try to curtail our expenses to increase the amount of saving. This method of saving is not very perfect. It is because you can curtail your expenses up to a certain level only. You cannot cut short your genuine expenses like food, rent, fees etc. In general, a person can save 20% to 30% of his income. So, this is limited to a certain extent but you can grow your income unlimited. You can increase your income by many ways depending upon your proficiency and willingness.

We do not utilize our time in making wealth

Most of us talk about price of the Mango we purchased today. The person who brought that Mango at a cheaper price is supposed to be smarter than others. Suppose he saved 200 rupees in this purchasing. Now calculate how much time he spent in this shopping. He went to the wholesale market which is 10 Km far from his house. He spent three hours and the petrol for this shopping.

This will not add value in your life because your time is very much precious.  You should try to make money by using that 3 hours’ time. Think to convert your time into money in the best possible manner. Focus yourself in earning high instead of saving pennies.

We don’t take risk even if we can

Many a times we do not analyse our risk bearing capacity in tune of our financial health. We feel fear even in taking calculated risk in investment. It may be due to certain socio psychological causes. It is important to do an adequate risk profiling and make informed investment decisions. The process of identifying investor’s risks appetite is called Risk Profiling. This will give a fair reflection about the amount of risk to be taken by the investor.

We work hard for money and our money should work hard for us – Let’s give this opportunity to it.

Common mistakes we do with our investments